Legal Battle Over Token Airdrops: Crypto Lobbying Groups Support Lawsuit Against SEC

The ongoing legal battle between apparel brand Beba and the US Securities and Exchange Commission (SEC) over token airdrops has garnered support from major crypto lobbying organizations, the Blockchain Association, and the Crypto Council for Innovation. The case, filed in March, seeks clarity on how token airdrops fit within US securities laws, with the plaintiffs arguing that airdrops do not meet the criteria of an investment contract under the “Howey Test.”

The Blockchain Association and Crypto Council lawyers have filed an amicus brief in support of Beba and the DeFi Education Fund, highlighting that token airdrops typically involve no investment of money and therefore should not be subject to SEC regulation as securities. This legal dispute comes amidst SEC Chairman Gary Gensler’s push to regulate digital assets under existing securities laws, a move that has faced backlash from the crypto industry.

The SEC has moved to dismiss the lawsuit, asserting its authority to regulate crypto assets as securities. However, the Blockchain Association and Crypto Council are urging the court to reject the dismissal motion, emphasizing the need for regulatory clarity to prevent stifling innovation in the US crypto industry. This case underscores the growing tension between regulators and the crypto sector, with significant implications for the future of digital asset regulation.